Judge Richard Leon’s opinion in the AT&T-Time Warner vertical merger case will likely be evaluated by antitrust attorneys for years, but what do lawyers think about it now?
My story after the decision talked about how it is likely to impact vertical health-care deals like CVS’s acquisition of Aetna and Cigna’s acquisition of Express Scripts. Essentially, the article explained that these transactions won’t get a free pass based on the court’s analysis of AT&T-Time Warner. Health-care and video content are very different markets. And AT&T-Time Warner was a “pure vertical” deal, with no elements of the merged businesses creating a concentration in an existing market. That, however, isn’t the case with the health-care mergers.
Still, there will be significant hurdles for regulators should they seek to bring another merger case in the health-care space based primarily on theories of harm caused by vertical acquisitions.
I interviewed Douglas C. Ross, a partner with Davis Wright Tremaine in Seattle about the AT&T-Time Warner opinion.
His comments, while not all directly health-care related, were too good to leave in the “interview notes” file. Given Ross’s background—he is also a law professor—and years of experience in the field, his reading of the opinion is worth its weight in gold to antitrust practitioners.
“Perhaps fittingly, as this is the first major antitrust decision rendered by a court in the Trump era, it’s ‘huge’ in every way—from its length (172 pages with enough footnotes to qualify it as a law review article), to its exuberant style (quoting ‘Nobel Laureate Bob Dylan’—a nice touch and perhaps an effort to one-up the Ninth Circuit which, in a hospital merger case three years ago, quoted Yogi Berra), to its over-the-top (and unprecedented!) use of exclamation points,” Ross wrote to me via email.
“Most of all, it’s a huge loss for the [DOJ] Antitrust Division,” Ross said. “Even though the judge ended his opinion by saying the ‘temptation by some to view this decision as being something more than a resolution of this specific case should be resisted by one and all!’ it’s a huge loss for anyone thinking of bringing a vertical merger case in the future.”
The DOJ must contemplate just such a vertical merger challenge in evaluating the CVS-Aetna and Cigna-Express Scripts deals. Despite their “huge loss,” regulators have not abandoned their obligation to explore the theories of harm that can come from vertical mergers.
Read my story here for what harms DOJ attorneys think can come from vertical health-care deals.
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